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tv   MONEY With Melissa Francis  FOX Business  August 21, 2012 5:00pm-6:00pm EDT

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liz: we would tell sell. they should put us on a stamp. the floor crew is of laing. david: we could all be together. if "the simpsons" doesn't sell, you better stick to historical figures. liz: thanks for being with us. "money" with melissa francis is next. >> i'm tracy byrnes in for melissa francis and here's what's "money" tonight. the well the fallout from the worst drought in 50 years takes an unnerving turn. ike in animal anthrax puts the farming industry in total edge. the drought escalating the risks of infection. we get insight how severe the threat could become. plus talking about it all day, warren buffett ditches the munition approximately bond market. he terminates billions of dollars in exposure as more cities and states across the u.s. start to flounder. how menacing an omen is their financial futures? a black market boom for
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stolen apple products? a wave of iphone and ipad thefts are fueling analyst it new industry that spans the globe. the reporter blowing the lid off the story is here with details. even when they say it is not it is always about money tracy: all right. first let's take a look at the day's market headlines. stocks fell after flirting with four-year highs earlier in the session. wall street is anxiously looking toward the release of the fed's fomc minutes tomorrow for any hints at new stimulus measures. the dow fell 68 points. that is the largest loss in nearly three weeks. shares of dell sliding after-hours. this is following its second-quarter earnings report. now the pc-maker did beat profit estimates but came in light on revenue. dell also lowered its forecast for the rest of the
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year warning about weak consumer demand. oil prices climbed to their highest level since mid-may. crude settled up .7 of a percent at $96.68 a barrel on the nymex. more bad news for the mighty mississippi river. the low water level on the nation's biggest river system is killing the shipping business. commercial traffic is down by as much as 2/3 because of the drought. part of the river is shut down. with more than 100 ships plain stuck in transit. products that can not get shipped will have to hit businesses nationwide. we want to bring in co-owner of a shipping lines. austin, we want to hear from you directly. how is your business being affected by this drought? >> well, i can tell you we're operating in extreme conditions. the low water now is actually even more intense because of the flood we had last year. the sediment rand mud and
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different variations impediment that came along with the flood last year are only intensifying the effects of low water and drought. the channel is narrower and shallower than it would be during the low water. tracy: that is it interesting today. this time last year we had 180 degree reversal of the river. it is amazing how quickly it can happen and you're saying that the sediment brought in by the flood is making it harder now to basically to dredge what the river these days? >> there is more sediment. the flow of the river rose at the ceiling of the river last year. it has made it more difficult, and more shallow and this river when our pilots come around and normally know what a river would look like at this river level and water level is it is not. it is completely different. this is any spot we're supposed to be looking out for shipping trails and traffic it is completely different than what it normally would be.
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tracy: so now if i understand this correctly, for every 17 tons of cargo on a barge, it sinks an entire inch. so that would mean right, as the water lowers you have to remove cargo? >> that's basically it. as far as what drafts and how much product under indicates what draft that has, has a lot to do with the weight of specific product we move. but i can tell you this much, one of our barges typically move three barges. we move gasoline, jet fuel, any petroleum product. one barge carries same amount of product as 144 18-wheeler trucks. when awe take a third of the product off the barge in order to operate the shallow water, you see how many more trucks that puts on highway and how many more railcars you use to move it around the country. it becomes very expensive and very critical. tracy: let's talk money now. how is this affecting revenue for you?. >> generally our revenue, very expensive to operate these vessels all over the
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country. so generally what our profit margins indicate in the last couple feet of product we can fit on a barge. so every bit of product we take off a barge, anybody that is moving product by barrel, bushel or ton will see an impact into the profit margin. now, what is being recouped by that we're utilizing more boats, more barges, more equipment to move the same amount of product around the country, which means for the every day consumer, transportation costs are up. it is costing more to move less. that will get passed onto the american consumer, probably over the next year. tracy: that is what i guess everybody at home is really worried about. how does all this get translated? you're saying your transportation costs are going up. you're inevitably will pass that on and that will end up in the products we're seeing at home? >> i think so. not only our transportation costs go up but the transportation costs and production costs of the people who produce the products we're moving, their profits are being sliced into also. as they try to recoup some of this cost and the american, entrepreneur tries
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to keep up their head above water that is going to indicate and produce more expensive goods and commodities for the u.s. consumer next year. tracy: we're about to talk with someone working with the army corps of engineers. in your opinion are they handling this property? >> they're doing a great job. they're working really, really hard. they have been very good in the their communication and their efforts. they're doing everything they can. they're fighting a war against the mississippi river right now. they're holding their own. they're keeping commerce open for the united states. we owe them a big pat on the back and thank you up to this point. tracy: that is really great to hear. austin golding, golding barge line co-owner. good luck with all this. thanks for being here. >> thanks for having me. tracy: let's talk more what is happening and what is being done to make sure that ships can navigate the mississippi. we'll bring in bob and sister son, spokesperson for the mississippi river commission. he is working with the army core of engineers to make sure shippers can keep
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moving goods as austin said. bob, thanks for joining us. peep want people want to understand what is happening here. we have this chief river, the mississippi. it goes from northern minnesota all the way down to the gulf coast. >> right. tracy: there is a 11-mile stretch pretty much shut down? >> that's correct. and the coast guard gave us a good news a few minutes ago they would be reopening the river by nightfall. so we'll start moving traffic, southbound. and then, i'm sorry, northbound at night. southbound by day the way i remember it. so that will kind of open the choke point. there are over 100 tows backed up at that 11-mile stretch. we do have eight dredges working 24 hours a day, 7 days a week. and to try to keep america's super highway, like you said, it is the nation's superhighway and the on-ramp of where the harbors and
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ports are located. we're dredging them as well. tracy: but, you know, austin mentioned it is getting more expensive to move things. obviously someone is dredging this, these operations that cost of these operations clearly being paid by the taxpayer, aren't they? >> yes, they are. this year the core of engineers received, ironicly $1.7 billion because of last year's tremendous record-setting floods. and this year, because of that flood and because of the additional sediment that it deposited, we're using extra 2 or 300 million dollars to increase dredging operations and keep the harbors open. so we have got more money to keep, you know, the arterry open but at the same time, as mr. golding was saying, it is a tremendous value to the nation. without this superhighway, the cost of transportation would go up exponentially. probably over 200 billion in
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just a very short period of time. so i think the last great drought, 1988, it was over a billion dollars in additional shipping costs. tracy: wow! okay, so what is it going to take for us to get back to, i mean to get it going again, to get back to normal levels? how much rainfall do you need? >> well, it, i don't know the exact amount but it would take a good, 10 to 12 inches of rain over probably 1,000-mile wide area of the nation to bring the river levels up to where the average is. that we're about 12 to 14 feet below average right now. so, i'm not a meteorologist but i'm sure that amount of rain would be a tremendous boost and get us back close to the normal. tracy: i can't imagine that kind of rain coming anytime soon though. bob anderson, thank you so much for taking time. i know you are busy out there. mississippi river commission
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spokesperson. good luck out there. >> oh, thank you very much. i appreciate it. tracy: all right. so there's also a scary side to this whole drought. that we haven't heard a lot about. believe it or not anthrax. the deadly bacteria is actually thriving in these dry conditions. over the past two weeks, more than 100 animals died in colorado and texas result of the anthrax infection. joining us now, dr. keith ward, a veterinarian with the state of colorado. all right, doc, thanks for joining us. to me this is kind of scary. the dictionary definition of anthrax it is a disease infecting cattle, sheep and humans. how do we know this is not going to spread to human beings? >> you know, tracy the disease hasn't been seen in the state for over they are years but historically we've had anthrax in cattle on a common basis. fortunately it doesn't spill over to people very often. tracy: are you sure? sort of doesn't sound right. talk about the animals000. how many animals have been
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infected so far? >> the index ranch we've had about 60 mortalities. we have two adjoining ranches had one cow each. so the spread outside the index ranch has been limited. tracy: all right. but more than 1600 animals have died died in the 2001 anthrax outbreak in texas. so we've seen, we've lost a lot of animals to this disease over the years. is there a way to contain it? >> you know it ebbs and flows. it is a soil-borne bacteria. when conditions are right, typically with either drought or flooding it creates a favorable environment for the bacteria. in this case in colorado it has been 31 years but in this area of the plat river valley the conditions are favorable for the bacteria and it certainly infect ad number of cattle. tracy: interesting the bacteria thrives in the dry conditions. so you get cows that have it. ranchers are working with these cows. how do we know that beef is
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not going to be affected, beef prices, because of the anthrax in these cattle? >> well with the overall number of cases in colorado percentablewise is exceedingly low. our ranchers are aware, veterinarians are aware. if the ranchers see cattle that are affected that have clinical signs they know to contact their veterinarians. tracy: and then what? are they kurd or are the cows, cattle taken off the market? >> well, the good news in this case, no cattle left the farm prior to the quarantine being issued. no cattle went to livestock auction markets and more importantly no cattle want to slaughter so the food supply is safe. tracy: that is the concern at the end of the day, right? are you worried about this getting out and people being nervous, you know what? i will not have a steak for a while until they figure the anthrax thing out? >> people shouldn't be worried. the overall risk of the
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disease in people is essentially nil. only contact would be with those ranches that have infected cattle. the food's safe and the monitoring systems have been effective. tracy: and therefore no impact on prices down the road you don't think? >> i don't think from this outbreak. a number of states deal with this on an ongoing basis. north and south dakota and texas. i think in colorado because of the newness and the, background information that we have on the anthrax i can understand why people would be concerned but the food, the food supply and the movement of animals both have safeguard in place. tracy: right. okay. we're going to take your word for that. anthrax in of itself sound scary to me. dr. keith ro h.r., veterinarian out in colorado. thank you for taking the time, sir. >> tracy, thank you for the opportunity. tracy: make people aware, that is the least we can do. warren buffett is making people aware. he is saying bye-bye to the muni market. is this a signal cities and
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states across the u.s. are going to sink? lawmakers spar over further measures to stimulate the economy. steve forbes said it is time for the central banks to back away from the recovery all together. he is here to explain. more "money" coming up. ♪ .
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♪ . tracy: billionaire investor warren buffett sending shockwaves through the markets today. he is pulling out of the municipal bond deal five years ahead of schedule. interesting thing is that buffett's $8.25 billion muni bond investment just hasn't defaulted. what does it mean for financially embattled cities and states across the u.s.? let's ask the chairman of the noil finance authority and ceo of development specialists. bill, thank you for being with us. we want to know if warren buffett knows something we don't, right? we have a $3 trillion muni
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dollar market and he owned $8.25 billion of credit default swaps. we don't want to get in the weeds. basically he would to pay if cities defaulted. >> i never want to underestimate warren buffett. i never want to argue with the fact that he knows more than i do but in this particular case, these aren't defaults on cities and municipalities. if you look at the underlying derivatives state issues. in other words these were against the state of california's bond. bonds and the rest of it. -- illinois. the chance of a sovereign state in the united states defaulting on any of its bond offering in the near future is about nil. tracy: right. >> hasn't happened for 80 years. states can't even file bankruptcy. i think warren was pulling in his horns. remember his involvement in the municipal market is far from over. he still owns one of the largest monolines insurance insuring municipal and state bond. i think he takes money off the table occasionally as we
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all do. tracy: he still has $8 billion in credit default swaps,debt issuances out there, right? hundreds of cities and munition nalts he is covering. -- municipalities. >> that is the interesting thing, tracy. he had 8 million in state issues and similar number in municipals. he can't pull those off the table until the bonds basically run their course. many of them not until the end of this decade. what he is doing simply reducing his exposure, a prudent thing to do when wonderful a chance to take risk off the table. tracy: it is billion, not million. >> i'm sorry. billions what i meant to say. we're get used to that, yes. a billion here, a billion there, it all adds up, right? tracy: do we know he made money. >> i suspect he didn't lose money. think about when the derivatives were issued. they were all issued in 2007 just before the crash. since there are no defaults and i suspect, remember the underlying purchaser was lehman brothers.
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some of this has to do withed wind up from lehman brothers and the estate wanting to settle for something reasonable. warren probably took advantage of that window. the larger issue you speak of is there reason to be concerned concerned about municipal markets these days an obviously there is. obviously there have been a series of bankruptcies in california. having said that the municipal market is probably the best and most stable market of all the markets americans can access. 70% of the debt is held by individual investors as opposed to inverse in most foreign lands. it is a good bet still. tracy: what is really interesting, just last thursday, california sold 10 billion again with a. about, in short-term notes. they had their biggest muni debt offering this year. people bought them. somebody is obviously still comfortable. >> and they did. if you look, tracy. what the yield offerings were on the bond, they were infinitesimal. there is flight to quality in this market. when your savings account is
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paying less than 1%, when the treasury bill market is sometimes being subsidized by investors there are precious few things to give you a stable return and sovereign state bonds are one of those. tracy: is this a good trade? should i be buying into these things knowing at the end of the day california will probably get bailed out? >> i'm not sure that call frn gets bailed out. i think in the long run growth bails out california as does most state sovereign bond issues. quite a different thing that municipals. i would tell everybody, your grandfather's municipal bond, which is tax anticipation bond, general-obligation bond, issued in advance of tax royalties or tax payments are as safe as they have ever been. they're offering a yield comparable to what they were offering in the 20s when they were used in a widespread nature. revenue bond and conduit bonds and all the unrated bond are quite a different things. so it is like anything else. if you want to invest in municipal bonds you should
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hear the statement this is a municipal bond but you should sit down and decide what type of municipal bond is best for me. some of the yields here truly represent substantial risks above and beyond the standard revenue obligation bond. tracy: they do. it is important people read the prospectus and figure out where they are in the pecking order if god forbid they go under, who gets paid first. you made the best point of the day. the underlying bonds of the credit default swaps he closed out were on the states and not the munies. so the muni market in theory should actually breathe a sigh of relief knowing that. >> to some extent but you know i got a call from one of your competitor journalists not too long ago telling me in 2011 the ifa i chair was the responsible for largest default in the municipal space, 229 million. when i drilled down it wasn't a governmental issue. it was conduit bond issued on a tax-exempt basis for a health care structure which was bought by private
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investors. it really isn't a municipal bond in the purest sense but people tend to lump all the issues into one definition and that's an education problem for the public, not for the markets. tracy: you're absolutely right about that. that's why sometimes you need the professionals like yourself. thank you, sir. bill brandt. >> always a pleasure, tracy. tracy: thank you, sir. telling you there are some smarter people than me. good thing we have them on these shows. wall street waiting for bated breath on signs of more stimulus from the fed. steve forbes says this is only leaving our economy blue in the face. he is here to explain next. believe it or not a wave of iphone and ipad thefts are funding one of the new heft and most lucrative black markets on the globe. a reporter uncovers this shady black market. here's question. do you ever have too much money? ♪ .
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tdd#: 1-800-345-2550 will help you get started today. ♪ . tracy: adding only 163,000 jobs last month and economic growth still really weak. the looming question is whether or not the federal reserve should go ahead with another major round of stimulus to help the recovery. tomorrow's release of its fomc minutes may provide a big hint but in the meantime atlanta fed president dennis lockhart made a strong case against later today. >> there is a risk that monetary policy is employed too aggressively and without effect to address economic problems that can only be resolved by fiscal reforms that involve making tough choices about the allocation of public resources. tracy: so would a third round of quantitative easing finally do the trick and get
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the economy moving? or would it just make things worse? joining us now, steve forbes, chairman and editor of in chief of forbes media and the author of a new book, "freedom manifesto". thank you for being here. i want to talk about the book. go back to what our fed is doing. should they give more money to the markets? >> no. they're harming the patient, not helping the patient. their ultralow interest rates actually hurt small businesses. it has been a real boon for government debt financing and big companies. but the job creators still are having a dicey time getting credit. so the fed is doing more harm than good. anytime you detablize the dollar, make it go up and down like a yo-yo, like a clock. if you don't have 60 minutes in an hour, very hard to do commerce. tracy: what is interesting, we see what happened from qe1, qe2, love diminishing returns. we had a nice bounce after first one. maybe after the second one. the market was up for a couple weeks. that was the end of it. businesses are sitting on
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cash. no one is hiring because everyone is concerned and nervous. so why they even thinking about doing this again? >> that is the nice thing about being a government agency. failure does not deter you. you go try it again. whereas in the marketplace if you do something that doesn't work and keep doing bad stuff you will be looking for a new job. tracy: so most people still think it is going to come though. what happens if it does? >> i think the markets may have one day of saying oh, help is on the way. then the realization will sink in. no, structural changes are not being made. printing more money and storing it back at the fed will not get this economy moving. tracy: what happens though? do we need an election to change the way people think? because up until the election we have the same mentality. >> that's the problem. well, also the opportunity. i think one of the things that i hope come out of the election is not only a change in the government but also a change at the fed. the fed has tried stuff that has not worked. its job should be a stable dollar. stop trying to punish savers
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in the name of the economy. when you have something stable you can plan for the future. if the fed does its part, congress does theirs, this economy can come back to life. tracy: be interesting to hear tomorrow out of fomc meetings. in the past we start to hear the fed punt it to congress. congress get your act together. they're kind of not either, are they? >> no the fed has to get its act together. zero interest rates has not worked in japan for 20 years. tracy: right. >> clearly it has not worked here. they have to get their act together, congress has to get its act together and the next president has to get its act together. tracy: a lot to ask for, don't you think? congress has the huge fiscal cliff. we've been talking about it for months now. nothing is get being done about it. do you expect anything to happen at the end of the year? >> well see after the election. if you get a prospect of a new president, maybe president obama will make a deal. if romney comes in they will have extension, avoid the fiscal cliff. everything will be put off
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for a year while congress deals with the tax code. even if it takes three weeks, romney takes office january 20th. i think everyone expect it is will be made retroactive to january 1st. >> i'm in the same camp as you are on that. let's talk about the tax code a little bit. what should be done because it is a big ol' book of favors? >> it shows the worst of a crony government. tracy: right. >> you go there. don't eastern it in the marketplace. deal with it through lobbyists and change the tax code. we've had 14 thou changes since 1986. it is insane. i think we should throw the whole thing out like paul ryan would do. start over. two rates. i think we can do with one. dressic simplification. imagine the brain power. 7 billion hours we spent filling out tax forms for what purpose? tracy: is there the political where with all to junk the book like i say? >> only if you get a real mandate from the people. congress won't do it on its own. why? because it is a huge source of power. everyone comes with their
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checkbooks. we have to change it. 10-year reception. tracy: where will they put all the favors if we get rid of the tax code? talk about your book, "freedom manifesto. ". i have it right here. >> it makes the case free markets are moral and big government is immoral. in the past we told government is out even if it is inefficient helps the small buy. takes the rough edges off the market. the markets are amoral and cold. big government is the one that turns out to be greedy. big government turns out to be in the way of opportunity. free markets create opportunity. take the example. one of the examples we site. apple versus solyndra. apple goes to the marketplace, new products, great jobs, higher standard of living. solyndra, crony capitalism. tracy: our founding fathers wanted free markets and then somehow we got away from it. you think we'll ever get back there again? >> yes. i think the real debate, one of the big he do bates coming what best serves the public good? i think free markets, a sensible rules of the road.
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founders understood it. we understood it until the great depression. we'll realize basic principles, positive principles of freedom again. tracy: pick up steve's book. "freedom manifesto". thanks for sharing that with us. >> thank you, tracy. tracy: the dark world of apple products, you never thought there was one, did you? a surge in stolen iphones and ipads becomes the center of a booming international black market. a reporter is breaking the illicit details joins us next. plus, cloud funding is planning to kick in the front door and revolutionize the real estate market. we have more coming up. ♪ . [ male announcer ] if you have to take care of legal matters.
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tracy: seems like just about everybody wants an apple product these days. so it is somewhat understandable people will do just about anything to get their hands on one of the much so there is booming black market for apple gadgets. they're listing so many apple devices from unsuspecting subway riders thefts are up 55% compared to this time last year. the most stolen devices are ending up in the middle east. joining us now, "new york post" reporter pedro olivera has been following the story closely. let's talk about this. basically i'm on the subway. i'm checking out my iphone. somebody rips out of my hand and somehow ends up in the middle east. >> that's right. tracy: that's pretty much it, right? >> there are a few things comes in the middle of it. there are quite a few players on the black market. person who steals it and cleans it up and works in other networks. if you take the phone from
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at&t it won't work there. tracy: there is ring going on here. why the middle east? >> we're not sure. people seem to be very interested in the product down there. for example if you go to other countries it is just too expensive. if you go to south america could pay as much as 2 times the price of an iphone that you would pay here. so a lot of times, just the fact it is really expensive to buy there legally. tracy: right. >> if you use the black market it is half the price. tracy: is apple said anything or doing anything about all this. >> i don't know. i don't know they have said anything to curtail it. tracy: interesting though, that you and i were talking on break almost a boon for apple, right? that means people have to buy another phone. >> that is exactly what ends up happening. unless you have insurance on it. a lot of people won't get it. a lot of people will not pay for it. tracy: talk about how it ended up on your desk. you said originally they reported that grand larceny was up. no one actually broke down what was being stolen, right? >> right. tracy: so then how did you find out it was more apple products than people could
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imagine? >> i had a colleague working on the police track. he got data explaining how many of these products were apple products. as it turns out, 4200 of those 25,000 devices of those stolen this year were apple products. it is about 17% of all grand larcenies in the city are ipods and independednt pads. tracy: really interesting, they're just being peck pocketed. >> mostly. tracy: i do it too. put it in the jean pocket. people rip it out of their pocket. >> they target people not likely to chase them. there was a case of a boy 16 years old instructing some of his friends to steel from moms with strollers. tracy: ah. >> because they couldn't go after them once they are stolen. tracy: tell my mother to lock up her iphone. do you have any idea how much these phones are being sold for in the middle east? do we know that kind of information? >> we're not sure. we know people here will sell them for $300 to whoever is sending them out there but there is no idea, no way of telling how much --. tracy: there was a ring for
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a while with china but people were legitimately buying them here and carrying them overseas. they were doing it somewhat legitimately. this is just theft? >> yeah, exactly. tracy: so the moral of the story is, hold your iphone tight. ipads too, right? >> that's right. tracy: pedro, good stuff. thanks for bringing it to us. >> thanks for having me. tracy: pickpocketers, man. gives the city a bad name. who needs a bank loan when there is crowd funding. the hottest new platform of investing takes on the housing market. a man bringing real estate investing to the masses is here with his bold plan. we have got that next. at the end of the day it is all about money. all about money. ♪ . [ engine idling ]
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♪ . tracy: so a new way to invest in real estate, following the models of successful crowd funding investor initiatives. a new start up is making commercial real estate investments possible for the masses. sunrise launched two weeks ago and raised $20,000 from investors who want to buy shares of a downtown washington, d.c. building.
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joining us now, ben miller, cofounder of fund rise. ben, i think is really cool idea. let's explain crowdfunding. it basically collects only small bets from people and invests collectively. >> right, right. so, what we're doing we're sourcing capital directly online from the local public. it is a direct public ofrlg, and we were able to do it before crowd funding was by sec by using regulation a. tracy: basically says that an offering of $5 million or less is allowed? just to put it really simply. and you went this route because you were getting sick of wall street investors. why? they weren't giving you money? >> well, so i come from a real estate family and we've been developing in washington, d.c. area for a long time and after the 2008 recession, i felt like i just couldn't, i couldn't take money anymore from the typical wall street
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institutions. my brother and i were building in emerging neighborhoods. we felt like, who should be the investor? i me the local neighborhood should be the investors, not an institution that has no natural connection to the places we're building. tracy: okay. so, i want to invest in your building. what do i do? >> so, right now you go to fundrise.com. we have a current offering, 1351 h street, northeast. you go on. join fundrise. if you live in washington, d.c. or virginia you can buy a share for $100. tracy: i have to live in those areas? what if i don't? >> the way regulation a works you have to not only get it reviewed by the sec which took us seven months, but also get it reviewed in each state you're offering and selling in. so that was washington, d.c. and virginia. ultimately only so many states we could do. tracy: i understand. so the, for $100 i get a share. what do i get in the end? when do i start to see
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dividends from this building? >> so, when you buy a unit in the company, the company owns a property on h street northeast. and also 30% profit share in the business inside. and so you make money from rent, and from, if the business is successful, you're successful with it. tracy: so do i get a check like a monthly dividend check? how do you pay them out? >> what we also are heavily invested in it. we put a lot of money in. we're basically investing side by side with the local public. and so the place is supposed to open in the spring. once they start paying rent and the business starts generating profits that's when we like it to pay out dividends. tracy: do i have the option as a investor to roll my money, let's say into your next project? >> each offering stands on its own. but we feel like, i mean deepak advertising investing in local real estate is the future of real estate. basically you can make the
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neighborhood your partner. i think that has a lot of power. tracy: i'm with you. get the community involved and i think they take a little more pride in things. you go to fundrise.com, right, if you want to invest in. >> right. all of sudden you have the power to build your city and build your neighborhood and see the impact of your money and potentially profit from it. tracy: i think it is a pretty cool idea, ben. thanks for bringing it to us. >> thanks. tracy: we have to get him up here to new york city. consumers may be on the sidelines but can nike's first $300 plus pair of lebron james sneakers help them jump bark into the game? i'm going no but what do i know? we have details on this impending frenzy next. you can never have too much money unless of course you spend it on lebron's sneakers. ♪ .
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questions. when you're caring for a loved one with alzheimer's, not a day goes by that you don't have them. questions about treatment where to go for extra help, how to live better with the disease. so many questions, where do you
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start? alzheimers.gov. the answers start here.
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this is a test. tracy: it is time for a little fun with "spare change." tonight we are joined by fox's very own adam shapiro and monica
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crowley. my girl. i'm so glad you're both here. we are talking about this nike ad, putting their most dedicated people to the test. the new lebron james basketball sneaker. they can't raise the prices. five to 10%. personal, before we even talk about the rise in sales, monica, you could argue, you could potentially pay more for she was. >> and apparently there is a market for this. there is a is a celebrity endorsed come in especially high and sneakers particular sneaker has electronic functions and there is even a big market for this. but if you are a parent and a child come soon said i want 315-dollar nikes, i don't think that's happening. >> timeout, timeout.
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don't some shoes that women wear -- don't a lot of them cost in the 300 to 500-dollar range? gerri: tracy: here's the difference. the problem with these sneakers is that many are buying them and they are not wearing them. there will be grown men buying the shoes as well. >> but then they will be humanly it on the basketball court. >> there is a big secondary market for this as collectibles. the 315-dollar turnaround on ebay. >> lebron james -- i got you to cover him when i lived in cleveland. he comes from nothing and built himself into what he is today. tracy: my son is a big fan. to do this, do the sneakers help the sox? >> shirt. of course figure. you need to get some in the local onyx.
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tracy: okay, we have a valedictorian. she plans to say the word hack. but on graduation day she said hell instead. her school says that they will not get her her diploma. until she writes an apology to whom, i'm not really sure. it four-point oh graduate her parents are backing her up. is she right? >> this is a tough one. it is infuriating that the school is doing. i did something and had to write a formal apology. sometimes having to eat a little humble pie in order to get what you want on the road is in your best interest. tracy: i am with you on the humble pie. but did she do anything wrong?
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>> i don't particularly think this is a big deal. but here is where she went awry. she had to submit a copy of a draft of the principle of the school board before the commencement. and the word was heck. and they are saying that you were not honest about your intent and we demand an apology. it is a little life lesson. tracy: it is wrong. this one blows my mind. if you think you are inundated with advertising, believe it or not, it a michigan started selling ads and coupons on toilet paper. the company plans to give their ad supporters in restaurants and cafés. whatever kind of engineers, who cares. >> it is great for the entrepreneurs, but do you really want your brand associated with

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